CREA reports home sales in September up 15.5% from year ago

Home sales in Canada’s big cities continued a rebound in September with a 15.5 per cent increase in sales compared with a year ago, according to the Canadian Real Estate Association.

The association said Tuesday that sales compared with a year ago were up in Canada’s large urban markets, including B.C.’s Lower Mainland, Calgary, Edmonton, Winnipeg, the Greater Toronto Area, Hamilton-Burlington, Ottawa and Montreal, while data showed markets were still in balanced territory.

“Home sales activity and prices are improving after having weakened significantly in a number of housing markets,” said CREA chief economist Gregory Klump in a statement.

“How long the current rebound continues depends on economic growth, which is being subdued by trade and business investment uncertainties.”

On a month-over-month basis, home sales through the Canadian Multiple Listing Service were up 0.6 per cent in September.

Higher home sales in September was a continuation of a rebound from a six-year low hit in February. Sales started to pick up in March after mortgage rates started to fall, said BMO senior economist Robert Kavcic.

“The winning streak for Canadian existing home sales continued in September…that marks an impressive seventh consecutive monthly gain, leaving the level of activity comfortably above the 10-year average.”

The five-year fixed mortgage rate has declined by about one percentage point to slightly below 2.5 per cent, a drop Kavcic said was significant from an affordability perspective but not likely to drop much further for now.

The increase in sales, combined with a small decline in new supply, pushed the sales-to-new listings ratio to 61.3 per cent, well above the long-term average of 53.6 per cent to favour sellers, but still considered balanced.

The home inventory, which shows how long it would take to liquidate inventories at current sales levels, also shifted to further favour sellers while still remaining in what’s considered a balanced market.

The national average price for homes sold in September 2019 was about $515,500, up 5.3 per cent from the same month last year.

Excluding the Greater Vancouver and Greater Toronto regions, the average price was less than $397,000 and amounting to a year-over-year gain of 3.3 per cent

The national benchmark home price index, designed to exclude homes on the high and low end of the market to more represent a typical home, had a year over year price increase of a more modest 1.3 per cent.

Benchmark home prices in Greater Vancouver were down the most from a year ago after a 7.3 per cent decline. The Greater Toronto area saw the benchmark price climb five per cent, while Ottawa saw the biggest gains reported at 9.6 per cent from a year ago.